Q: You mentioned there is increased government focus on cracking down on corrupt foreign practices. What is happening on that front?
Corruption is the engine of financial crime. The U.S. government, finally, is taking enforcement of the 1977 Foreign Corrupt Practices Act seriously. It’s long overdue. The UK Bribery Act and international organizations, along with nations like Brazil, are taking bold measures against corruption. The SEC and the Justice Department have many ongoing investigations of corrupt practices by U.S. companies with foreign public officials, including in South Florida. That’s no surprise. Business should be conducted honestly, and if corruption is behind business transactions, it should be prosecuted and the penalties should be heavy.
Q: Tracking trends on asset recovery is one of your specialties. Is law enforcement getting better these days at going after criminals’ ill-gotten financial gains? What are the big obstacles?
Financial criminals sleep soundly — even if they’re in prison. They know they have a 98 percent chance that their criminal proceeds are theirs to keep. Asset recovery is the forgotten art of financial crime. Government asset recovery is puny and produces poor results. Congress doesn’t pay attention to it. Private-sector professionals, some of whom are very skilled, face big hurdles, including lack of government help. The government couldn’t convince me there is a good reason it can’t provide some of the tons of financial intelligence it gathers to competent, honest representatives of financial crime victims.
Q: The federal government announced last year it will delay implementing some parts of the Foreign Account Tax Compliance Act, the controversial 2010 law known as FATCA. Why all the fuss about the law?
We call FATCA the “New Patriot Act.” Bankers shed crocodile tears about it, but they have only themselves to blame. Swiss banks, led by UBS, infuriated the U.S. Congress and the American people by their brazen conspiracy to lure U.S. taxpayers to keep secret Swiss bank accounts with millions of dollars and evade U.S. taxes. FATCA will require foreign banks to tell the IRS of U.S. persons who have accounts of more than $50,000. Failure to comply will expose them to big penalties. It is a just and fair law that seeks to even the playing field for all taxpayers. Who can squawk about that?
Q: “Threat finance” is a hot-button topic these days. You mentioned, “All of a sudden, we’re seeing a blossoming of interest by military and intelligence agencies concerned about financial crime.” What’s happening in that realm?
9/11 woke us up to many things, including the fact that all national security threats our nation faces have a financial component. Threats like drug trafficking, human trafficking, trafficking in nuclear materials and weapons of mass destruction, foreign corruption and, of course, terrorism all have a financial peg. Our military and intelligence agencies, and those of our allies, have millions of “boots on the ground” that see, hear and observe things that are pieces of the jigsaw puzzle, which, if analyzed alongside other pieces, may help choke off the finances of national security threats. That is why “threat finance” is so important in the financial crime arena, why the new CFCS (Certified Financial Crime Specialist) certification we’re building also has it in mind, and why the ACFCS (Association of Certified Financial Crime Specialists) Conference, on May 16-18, will train on it.
Q: Are sovereign governments getting better about cooperating and sharing information on suspicious financial transactions?
About 120 nations band together in a confederation called the Egmont Group. It facilitates the sharing of financial intelligence. There is justifiable distrust about sharing sensitive information with nations where the integrity of the top officials is questionable, but on the whole there is now greater international cooperation. The greatest impediment, we believe, to more thorough international cooperation against financial crime is a lack of political will in some countries, which results from corruption.